Choose the Legal Structure: To start an ecommerce business in India, the first step is to choose the right legal structure for the business. The legal structure depends upon different factors like persons involved, capital, and risk involved. There are 5 legal structures suitable to start an ecommerce business in India:
- Sole Proprietorship
- Private Limited Company
- Limited Liability Company or Partnership (LLC or LLP)
- One Person Company
Register the Business: The next step to start an ecommerce business is to register the finalised legal structure for the business. An entity can register its legal structure through the Ministry of Corporate Affairs or Registrar of Firms using the existing processes. Subsequently, it can also register on the Start-up India portal and mobile app as a “Start-up” to avail the benefits.
Get the Domain Name registered: The Domain name is the basic identification/name of the website which the user uses to access it. To start an ecommerce business, a unique domain name needs to be chosen for the business website which does not already exists. The domain name is registered as a trademark to protect it under the Intellectual Property Laws.
Get the Terms and Conditions Policy of Website: The Terms and Conditions Policy is an important legal document to start an ecommerce business in. It covers all the user and company covenants in order to restrict the liability of e-commerce website. These conditions are drafted to restrict the liability of the business and need to be personalised according to the type of activities the business is involved in.
Get the Vendor’s Agreement made: The e-commerce business also needs to prepare a vendor’s agreement. This agreement defines the relationship between the vendors their rights and duties and company’s right to act against the vendors in case of default.
Choose a Payment Gateway: Since e-commerce websites accept money online, the business needs to get a secure payment gateway. Some Gateways like Paypal or Payumoney require no setup fee whereas some like Payu or Ccavenue require the setup fee. It is important to have a payment gateway in place before you start an ecommerce business.